Cartoon on BC casinos and money-laundering by Olson in the Courier, 2011

June 2018 has seen a return of public interest in casino corruption thanks to the efforts of the BC government and Attorney General Dave Eby, and the report authored by Peter German that they commissioned. This attention to the rampant corruption in BC gaming is long overdue. We raised this issue during the period 2009-2012 and beyond, when we were opposing the expansion of the Edgewater casino in Vancouver.

There is a plethora of news stories on these new developments but start with these:
• Read the BC government’s ‘German Report’ into money-laundering in BC casinos HERE.
• Read Sandy Garossino’s article in the Vancouver Observer, which includes a call to A-G David Eby to call for a Charbonneau-style Public Inquiry HERE.
• Read Laila Yuile’s report on BC gambling corruption HERE. Laila has been a knowledgeable commentator on this issue for many years.

Please note that BC NEEDS A PUBLIC INQUIRY NOW. The German Report is not enough. Please ask A-G Dave Eby and the BC government to strike an inquiry. Thank you.

Wednesday July 23 was a great day for us at Vancouver City Council! Councillor Adriane Carr (Greens) achieved something really substantial in getting her casino motion passed. The motion is a little technical, so bear with us.

Councillor Carr’s motion, which she drafted after consultation with us, contained two parts. The first part of the motion was that since Michael Graydon, ex-CEO of BCLC crown corporation, was recently found by a BC gov’t audit report to be in serious conflict of conflict of interest when he took the position of CEO of Paragon’s Edgewater division, the City should write to the Gaming Policy and Enforcement Branch (GPEB) to demand his removal in the interests of integrity and public trust.

The second part asked that a restrictive covenant (RC) be placed on the casino site (“Site 10”) at BC Place preventing any increase beyond its current 600 slots and 75 gaming tables. While these numbers are already in the zoning by-law for that site, the RC significantly protects the commitment to no further gambling expansion on Site 10. It is also the only real protection against any change in legislation at the provincial level.

We must also thank George Affleck for agreeing to second the motion. He required that some minor amendments be made to it, but they were amendments that all parties accepted.

After the debate some further amendments were made by the mayor and Vision-dominated council but we all considered them friendly amendments. The motion passed unanimously. We would like to thank each and every councillor for their vote. Everyone did the right thing, so huge thanks to all.

Here is the motion that finally passed.

A. THAT the City of Vancouver write to the BC Gaming Policy and Enforcement Branch requesting that they follow the Gaming Control Act (Division 3 Sections 68 and 69) which gives authority to impose conditions on a gaming license holder if there are concerns over the integrity, lawful conduct or management of gaming.

B. THAT the City of Vancouver ask the Director of Planning to place the following condition on the issuance of a Development Permit for the Edgewater Casino at 39 Smithe Street, while recognizing that the bylaw previously approved by City Council prohibiting the expansion of gambling onsite is the ultimate authority:

Registration on title to the property of a restrictive covenant prohibiting any future increase in any form of gambling including the number of slot machines and gaming tables;

C. THAT City Council reaffirm Council’s decision on April 19, 2011 to place a moratorium on any and all applications to expand gambling or gaming facilities in the City of Vancouver.

We are asking our supporters to come to City Hall on WEDNESDAY July 23 [NOTE: this is a change from Tuesday July 22] to support a motion being put forward to Vancouver City Council by CouncILLOR Adriane Carr.

[Update late Tues: Adriane’s motion got a seconder – George Affleck. This means the motion will be presented tomorrow, Wednesday, sometime before noon most likely. The committee meeting starts at 9:30 and Adriane’s motion is 4th on the list. But we’ll update you regularly! Please plan on coming!]

WITH YOUR HELP we can force Michael Graydon’s ouster as CEO of Paragon Gaming.

AND

We can get Council to impose a restrictive covenant banning gambling expansion on Edgewater’s new site.

Councillor Adriane Carr will table a motion on Tuesday, July 22, asking that Vancouver Council request the Gaming Policy and Enforcement Branch to direct his removal, AND for an anti-expansion restrictive covenant to be placed on the BC Place lands as a Development Permit condition. The motion will then be put forward to Wednesday for discussion.

WE NEED YOU TO COME TO COUNCIL AND SPEAK TO THIS MOTION (if speakers are allowed, and we’ll know that on Tuesday) ON WEDNESDAY MORNING at 9:30.

Please register by CALLING 311 before 5 pm on Monday, or by REGISTERING IN PERSON on Tuesday by 9:15.

Say you want to speak to Councillor Carr’s motion B4.

Tell City Council that Michael Graydon and Paragon Gaming have to pay for their misconduct. We need government with the guts to say no to special treatment for insiders.

FOR IMMEDIATE RELEASE: Vancouver Not Vegas calls for Michael Graydon to be removed from Paragon Gaming

Vancouver, July 11, 2014: Following the report of the BC government’s internal auditor, Vancouver Not Vegas renews its February 13th call for the Gaming Policy and Enforcement Branch (GPEB) to block PV Hospitality (a Paragon Gaming-related company) from employing Michael Graydon.

“The government has the power to halt Mr. Graydon’s employment with Paragon and must act decisively to protect the public trust and integrity of the gaming industry,” says Ian Pitfield, a retired lawyer and member of Vancouver Not Vegas.

“The public can’t trust Michael Graydon, it’s that simple.” says Sandy Garossino, spokesperson for Vancouver Not Vegas. “This goes far beyond his $125,000 severance package. He will guide PV Hospitality through the BCLC development subsidy program, which might amount to as much as $100 million or more. The fox is in charge of the henhouse, and our government has to step in.”

The public interest must be protected in the face of the auditor’s report and statements by BCLC board chair Bud Smith, which demonstrate that Mr. Graydon:

Violated BCLC’s conflict of interest guidelines

Provided incomplete or inaccurate information to the BCLC board

Breached the no-contact provision of his resignation settlement

Maintained access to confidential BCLC material for 10 days post-employment

The auditor further found that other casino service providers expressed concern that Mr. Graydon’s knowledge could provide an advantage to Paragon Gaming.

In related news, Paragon Gaming currently co-owns and manages the Eagle River Casino, a small truck stop operation in Whitecourt Alberta, which has filed for bankruptcy, owing $100 million to creditors.

Vancouver Not Vegas is available for media interviews in response to the BC government’s report on conflict of interest in the case of Michael Graydon’s move from the BC Lottery Corp to Paragon Gaming.

The Vancouver Not Vegas coalition calls for Premier Clark to reinstate the Integrated Illegal Gaming Enforcement Team (IIGET), following revelations that suspicious transactions have more than doubled in casinos since 2011.

In 2009 the specialized casino police unit IIGET was disbanded weeks after it warned then Solicitor-General Rich Coleman that organized crime had infiltrated the gambling industry and was actively laundering money and loan sharking in casinos (see Appendix A).

By 2011 cash monitoring had deteriorated so severely that the BC Lottery Corporation was fined almost $700,000 by the federal agency FINTRAC for failure to control suspicious transactions at casinos.

“This is a complete systemic collapse of governance,” says Sandy Garossino, spokesperson for Vancouver Not Vegas. “There’s been no specialized policing presence in casinos for 5 years and organized crime has been brazenly active the whole time. BCLC has completely failed to control casino criminal activity.”

Vancouver Not Vegas renews its calls for former BCLC CEO Michael Graydon to be deemed unsuitable for employment with Paragon Gaming. “Did Graydon know about this report when he jumped without warning from BCLC?” asks Garossino. “For at least 5 years Graydon knew organized crime was active in BC casinos, and completely failed to rein them in. Now he’s going to head a casino of his own?”

“Canadian casinos are extremely vulnerable to money-laundering because they deal in cash and handle tens of millions of dollars every day.

Many investigations… have shown that members of organized crime use casinos for criminal purposes (e.g. loan sharking and money laundering) and that some of these criminal elements have successfully infiltrated the industry.

Since 2003 FINTRAC has sent several disclosure reports to the RCMP on suspicious transactions involving casinos… Anecdotally, police managers have suggested… nothing is being done to investigate these situations.”

Vancouver Not Vegas calls for the Gaming Policy and Enforcement Branch (GPEB) to refuse to recognize Michael Graydon as a qualified officer of the newly formed PV Hospitality ULC, due to the public perception that Mr. Graydon may have violated the Conflict of Interest Guidelines of the BC Lottery Corporation, and due to his possession of sensitive confidential information pertaining to Paragon’s competitors.

Further, Vancouver Not Vegas calls for the City of Vancouver to attach a restrictive covenant to the property’s Development Permit, permanently limiting the number of slots and gaming tables on the new Edgewater Casino site.

Finally, VNV calls for the BC Lottery Corporation to publicly disclose all financial projections and public subsidies associated with the proposed Edgewater Casino expansion at BC Place.

“Public trust and confidence in the integrity of the BC Lottery Corporation is at stake,” says VNV member Ian Pitfield. “The corporation’s own Conflict of Interest Guidelines enjoin management from conduct which raises the perception of conflict. These rules are meaningless if there are no post-employment consequences for violations.”

“The City must respond to Mr. Graydon’s actions. Paragon is building a casino that’s oversized by some 40,000 square feet, and the BCLC governs the number of slots and table licenses that will go there.” says VNV spokesperson Sandy Garossino. “Mr. Graydon’s defection raises grave concerns about his neutrality while at BCLC, and what promises may have been made to Paragon.”

According to previous financial projections associated with an expanded Edgewater Casino, the BC Lottery Corporation was scheduled to transfer $16.9 million annually to Paragon Gaming to off-set construction costs. PavCo has re-negotiated a 50% lease reduction to $3 million annually. No projections of increased revenues (net of revenue losses to other local casinos) to the BCLC have been made public.

Brazen Conflict of Interest by Former CEO Exposes Feeble Governance at BCLC

The resignation of Michael Graydon as CEO of BC Lottery Corporation (BCLC) to assume the role of president of PV Hospitality ULC in which Paragon Gaming Corporation is a partner raises serious conflict of interest and BCLC governance concerns says Vancouver Not Vegas.

“It’s a grave concern that the BCLC, which oversees an industry requiring the highest standard of integrity and transparency, would permit a departure of this kind from expected ethical standards”, says founding member Ian Pitfield.

“The Federal Government applies post-employment restrictions to public office holders. Why should the Province not insist on the same restrictions for senior employees of Crown Corporations?” Pitfield asks.

The Vancouver Not Vegas coalition calls for an investigation into the circumstances surrounding this move, and asks the BC government to answer the following questions regarding this and other governance issues within BCLC (BC Lottery Corp):

When did Michael Graydon begin employment discussions with Paragon, a company of which he was the regulator?

What assurances or commitments did he make to Paragon, his future employer, while he was in discussions with them concerning compensation, terms, etc?

What knowledge did the BCLC have of employment discussions between Graydon and Paragon, and did it approve it?

Why, after BCLC chair Richard Turner bought shares in Paragon Gaming in 2004, did the BCLC not institute a firewall policy preventing employment or financial relationships between senior executives. board members and regulated corporations?

Senior management at BCLC are in possession of significant confidential financial information pertaining to all gambling operators in BC. It’s unthinkable that it has failed to safeguard that trust by preventing conflicting employment agreements for senior executives.

It is unthinkable that BCLC has failed to safeguard the trust by prohibiting key employees from assuming employment with regulated gaming companies for a period of two or three years following retirement or resignation. But today’s news is only one chapter in a history of governance breakdowns.

Documented lapses in governance at BCLC include:

Unprecedented $700K FINTRAC fine in 2010

Documented loan-sharking, money-laundering in casinos

BCLC Chair Richard Turner’s acquisition of shares in Paragon in 2004, and subsequent move to become director.

Today’s revelation, combined with a repeated pattern of inept governance points to a rudderless corporation unable to exercise basic control over its key operations.

Message from Sandy, Lindsay, Ian & VNV to supporters following the Development Board hearing on December 16, 2013

Many among us felt enormous disappointment at the conditional approval of the preliminary development permit on December 16.

The applicants have approval to proceed contingent upon developing a harm reduction plan in consultation with the Vancouver Coastal Health chief medical officer, with reference to the Kendall report, Lower the Stakes.

The down-side is that a massive casino floor has been approved, despite very strong community objection. This is extremely troubling. In November 2011 Council re-zoned the BC Place site to permit a casino. For reasons that are obscure, rezoning was permitted for the square footage requested in the original proposal–or 114,000 square feet–notwithstanding that Council rejected additional slot machines.

Industry standard for a purpose-built casino is roughly 52 square feet per slot machine, or about 31,000 square feet for Edgewater, so re-zoning to permit 114,000 sq. ft was an unusual step.

In any event, Paragon applied for and got approval for a 71,000 sf casino floor space–40,000 sq ft larger than necessary.

Given the cost of land and cost of construction in downtown Vancouver, it’s not credible that an experienced commercial real estate partner would commit half a billion dollars to a project that’s more than 100% overbuilt.

In our view someone with authority has committed to these investors that more slots WILL be permitted, and that is most likely the provincial government, which always has the power to amend the legislation requiring municipal approval for additional slots.

Since we assume the provincial government will pursue more slots, while Vancouver City Council is in principal steadfastly opposed (and 2014 is an election year), our focus is firmly on those aspects of this development which fall under exclusive municipal jurisdiction.

We are encouraged by the mayor’s statement on the morning following the DPB hearing that:

Given (the) public concerns…which were raised at today’s Development Permit Board meeting, I will ask City staff to identify further measures to prevent any expansion of gambling in the future on this site, including amendments to by-laws or the Northeast False Creek Official Development Plan that will restrict the allowable casino floor space to the existing proposal.

This measure opens the door for us to take a more aggressive position to curtail this development. The Kendall Report, which chronicles an alarming increase in gambling addiction following the widespread introduction of slots in BC, has indeed been a game-changer for this project.

Our focus now shifts to two issues: pressing this Council to follow through with its commitment to permanently prevent expansion of the casino, and supporting strong and robust conclusions by the Vancouver Public Health Officer respecting harm reduction measures for the casino.

We will seek, among other steps:

• A covenant by the applicant not to increase slots and tables as a condition of its final development permit• Restriction of operating hours• Implementation of Kendall recommendations respecting alcohol service and ATMs• Public health review of casino operations and data gathering methods

The Mayor’s statement is a tribute to your persuasive arguments. Your dedication, commitment, energy and support keep alive the possibility that this project will never materialize in the form sought by the applicants.

Democracy was not served on Dec. 16 when the Vancouver development permit board held a public hearing on Paragon’s new casino proposal.

Many people who called the city were told there was no hearing, and even city hall had no reference to this critically important meeting on their website.

Although about two dozen citizens concerned about the social costs of expanded gambling spoke strongly against the doubled casino floor space at the hearing, their compelling, well-researched submissions were virtually ignored by the development permit board. The project passed with only minor conditions.

When Vancouver decided to build a new public library downtown, three architects’ renderings were presented for the public to vote on.

Edgewater Casino’s monstrous and inappropriate design, by contrast, is being rammed down our throats.

In the interests of a true democratic process, the public should be given a proper opportunity to comment on the building design for this iconic and highly visible site by BC Place before we are stuck with this eyesore at the heart of our city forever.

HILARY REID, Vancouver

Original here. And to read Hilary Reid’s presentation to Council at the casino hearings of 2011, click here.

Read the petition

Meta

Our Supporters against the mega-casino

To see the list of all those who supported our 2011 fight against the mega-casino at BC Place, both individual citizens and organizations, click here.

For statements and letters from some of our many supporters, click here.

WHERE THINGS STAND:
We had a victory in 2011, but what we defeated was gambling expansion from 600 to 1200 slot machines. Soon after, Vancouver City Council nevertheless passed the building at its proposed massive size, ripe for future expansion. Now, in light of the 2013 Kendall Report which shows a doubling of severe gambling addiction in BC in only 5 years, we believe City Council must immediately institute harm reduction measures if it plans to allow the relocation and building of Edgewater Casino at BC Place Stadium, in easy reach of residents and young people. Proximity to casinos is a major factor in rising addiction rates.